Malaysia’s labour market continued on improving trend as unemployment rate kept at post-pandemic low of 3.4% in Oct-23. Labour force and employment growth rates continued on moderating pace of +1.7%yoy and +2.0%yoy, respectively, the slowest in 2-year. On month-on-month basis, employment grew +0.2%mom, marking the 28-straight months of positive gains. Unemployment dipped further by -5.2%yoy, marking the 26-consecutive months of contraction.
Unemployed persons also dropped further by -0.5%mom to 571K, approximately 52K higher than average jobless persons 519K in 2019. For youth aged 15~24, unemployment rate slightly higher than the pandemic-low of 10.6% (2019: 10.4%). By employment type, employee which made up about 75.5% of the employment as of 10MCY23 increased steadily by +1.2%yoy while employer (3.5% of employment) and own-account-worker (18% of employment) increased by +4.0% yoy and +5.3%yoy, respectively, in Oct-23.
MIDF in reviews the latest job data said the strengthening job market will further reinforce consumer consumption and support overall GDP growth for 4QCY23 and 2024. It forecast the average jobless rate to be at 3.5 % for 2023.
The house added that the labour market in Malaysia is expected to strengthen further in 2024, backed by encouraging momentum in the domestic economy and reviving external front. Malaysia’s average unemployment rate is expected to average at 3.5% in 2023 and return to pre-pandemic levels at 3.3% in 2024. The return of non-citizens workers is expected to boost overall employment and reduce the jobless rate. As of 3QCY23, non-citizens’ employment is almost -0.8% lower than pre-pandemic levels.
As of 10MCY23, employment grew by +2.4%yoy (2022: +3.5%) while unemployment reduced by -8.6%yoy (2022: – 14.8%) and jobless rate averaged at 3.5% (2022: 3.8%). Continued improvement in the labour market will support consumer spending as the wage recipients to employment ratio has reached a new peak at 64.6% in 2022, among others thanks to the minimum wage salary policy.
